The Naked Negotiator

If you want to read a fascinating biography of a legendary dealmaker, philanthropist, and robber baron read David Nasaw’s biography, Andrew Carnegie (Penguin Press, 2006).

Although he stood just under five foot tall, Andrew Carnegie (1835-1919), as a dealmaker and corporate capitalist, consistently outgunned J.D. Rockerfeller and J.P. Morgan, the two other giants of the Gilded Age.

Carnegie was a remarkable dealmaker, salesman and negotiator who outwitted Rockerfeller and Morgan in most of their big deals. He was often unscrupulous. His business dealings were often unethical though not necessarily illegal at the time.

Carnegie is best known as a union buster. Yet early in his career he was lauded when a proposal for a farsighted deal to steelworkers tying wages to profits, so that both the bosses and the workers would share in good times and in bad. The union agreed to cut wages and increase working hours during a market downturn.

However, when the boom time returned, Carnegie reneged on his promises. The steel workers went on strike calling him a liar, hypocrite and scoundrel.

Carnegie believed it was contrary to the “laws of civilization” to pay workers more than the minimum they needed. To pay workers more than they needed was to “encourage the slothful, the drunken and unworthy.”

The great benefactor who bequeathed libraries, museums and vocational schools to the nation was happy to see his chief manager call in the Pinkerton guards who fired on striking workers.

President Teddy Roosevelt believed that, “if Carnegie had employed his fortune and his time to doing justice to the steelworkers who gave him his fortune, he would have accomplished a thousand times what he accomplished” with his generous philanthropy.

I agree with Roosevelt.  What do you think?

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Negotiators can be divided into three groups: foxes, bloodhounds and donkeys.

Foxes

Foxes are at heart devious. Ruthlessly competitive, they exploit negotiation opportunities to deceive and manipulate others. Life for a true fox is a contest; they win, you lose.

When foxes manipulate, they focus on the short term. If they are selling, they focus on the current sale. They don’t care about how their behaviour might damage their long term reputation so long as they close the deal in front of them.

Bloodhounds

Bloodhounds are detectives of influence. They recognise the negotiation opportunities inherent in any situation and legitimately take advantage of them. Influence opportunities are not good or bad in themselves - they are opportunities to build mutual gain.

Bloodhounds are win-win motivated. They use influence opportunities to create synergy - where one and one equals three. They also think about the long term implications of anything they do. They appreciate that a reputation built over years can evaporate in minutes with the wrong tactics.

Beware: Some bloodhounds are closet foxes.

Donkeys

Because they are stubborn, unwilling to learn and inflexible, donkeys botch most of their influence opportunities. Typically they fumble their way through meetings, presentations and negotiations.

Meetings derail in confusion and argument. Presentations fail to convince. Negotiations that have the potential to be win-win turn into lose-win or lose-lose.

Donkeys usually lack the skill to recognise the influence opportunities inherent in any situation. They also lack the techniques to skilfully manage an influence opportunity through to its best conclusion.

Turning donkeys into bloodhounds

Can you turn a donkey into a bloodhound? Yes, you can. Most donkeys simply don’t know how to analyse or manage an influence opportunity. Donkeys who belong to this group lack knowledge and need training.

A second group of donkeys has a natural distaste for using influence. They see influencing and persuading as unethical manipulation. Donkeys of this type can usually be won over with education and training. Most become enthusiastic bloodhounds when they learn that if you truly believe in the merits of your proposal, you are letting your customers or co-workers down when you fail to persuade.

The last group of donkeys is much harder to change. If someone is truly inflexible and cannot see the world through any other person’s eyes. He is doomed to remain a donkey.

Turning foxes into bloodhounds

Foxes fall into two groups. The first type of fox has become a fox because of an overriding ambition to succeed. Such people would like to be able to look themselves in the mirror in the morning and play win-win, but in a dog-eat-dog world they believe good guys finish last.

Most people in this group have a limited repertoire of skills. In negotiations they lack the skills to turn a win-lose haggle into win-win agreement. This group can be converted but the often need intensive training or managing.

The second group of foxes may be irredeemable. These foxes are genuine Machiavellians. They lack trust; they don’t care about other people’s needs and they delight in contests where they win and you lose. Training will do little for this group. What they need is a character transplant. Deal with them at your peril. If you can, avoid them.

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David Myers,  Professor of Psychology is an expert on the psychology of fear. Psychological science, Myers tells us, has identified four factors that drive up our perceptions of risk.

1. We fear what our ancestral history has prepared us to fear. Thats why we fear snakes and spiders.

2. We fear what we cannot control. We feel more in control when we are driving a car than we do flying an airplane.

3. We fear what is immediate. We are more concerned about the risks of taking off in a plane than the risk of dying from cancer.

4. We fear threats readily available in memory. We easily recall the 9/11 images and they make us hesitant to fly. Our brains are not designed to easily recall the fact that, mile for mile, we are 37 times more likely to die in a passenger car than on a commercial flight.

No wonder our fears drive so many behaviors. Since fear is largely an emotional factor, negotiators need to actively manage emotions. While you cannot directly control what someone feels, you can influence the drivers that fuel negative emotions such as fear.

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